Michael Pachter, video-game analyst, wizard and crystal-ball gazer has squashed rumblings that the social gaming phenomenon is a soon-to-burst bubble.

With the recent explosive success of social gaming, beginning with the Nintendo Wii and evolving into Facebook games such as Farmville, many people believe this is no more than a fad phase, and sudden success such as Zynga won’t last long.

However, Pachter says, “Nintendo Wii fans are now playing Farmville. The Wii was a bubble. The Wii bubble has burst. As for the social bubble, I don’t think it’s a bubble. I play Facebook games with my mother. This is not a bubble.”

The Wii was on top of the console heap for quite some time, before a sharp decline in sales led Xbox to the top for the last year. Pachter believes the reason for the Wii’s decline is too much competition in the casual gaming market from other areas, such as iPhones, iPads and Facebook. For the hardcore console gamers, only Xbox and PS3 are there to compete with each other, maintaining interest with big titles such as Modern Warfare 3. Meanwhile, Nintendo’s portable sales also take a hit from smartphones and Apple products.

While social games still make up a small part of the US game industry compared to hardcore console games ($1.1 billion vs. $8.8 billion), Pachter calls social games the “bedrock” of games, using a casino analogy to illustrate the difference between the two types of gamers.

Hardcore gamers are like the high rollers who casinos cater to, the ones who enjoy complicated table games such as poker or blackjack. The social gamers are the ones who play the cheap slot machines; popular casinos use these cheap slots to attract bigger crowds, to make the casino less intimidating to the “casual” visitor.

Pachter also stressed the importance of monetizing the social game industry, saying that 98 percent of the players aren’t paying for the games they play. He compares these games to other forms of entertainment in Western culture, such as TV and music sales, which has never been free (even TV uses advertisement support).

Pachter’s words serve as another reminder of how much Nintendo needs the Wii U to succeed.

Source: Venturebeat